Great insights from one of the guys behind meebo.com.

Folks are fond of saying that VCs have so much money they need to invest that they’re just giving money away. This really isn’t what’s going on. It’s true that VCs have pretty sizable amounts of cash to invest in promising startups, but the result is that they’re very careful with their time. They want to believe that your company is really exciting, can become a big business, and that it’s therefore something they’d like to spend their time on.

Read more of this entry from the meebo blog.

Note: Starting today, I will recommend the use of “Entrepreneurship” in place of “Technopreneurship” for a number of reasons. First is that I’ve come to realize that they are one and the same. Second is that there is a tendency for some individuals, especially the techie types (that includes me), to focus too much on the technology side and forget about the entrepreneurial aspects when the word “technopreneurship” is used.

First off, I need to acknowledge that an elective course on entrepreneurship (currently labeled technopreneurship) has been designed and integrated within computer science and I.T.(?) programs across a number of universities in Davao City. I’d like to clarify that this post is not intended as a criticism of those courses: I haven’t seen the design of those courses as of yet. Rather, I’d like to offer this post as a contribution as well as a means to start a discussion with the relevant individuals responsible for implementing this course.I’ll start by discussing some ideas that have been floating in my head since early last year.

What should be the objectives of the elective?

It’s important, when setting the elective’s objectives, to always keep in mind that its audience does not have a background on management and entrepreneurship. Therefore, to expect them to be entrepreneurial experts able to produce top quality business plans by the end of the elective would be too ambitious. We must note that even MBA students need to go through a number of courses spanning and integrating Finance, Marketing, Operations, and HR before they can effectively take on the new venture planning course. Squeezing this much learning into one tiny elective is too ambitious and will only end up frustrating both the teacher and the learner.Secondly, we also need to keep in mind that some of these students may not at all be interested in entrepreneurship. After all, this is probably why they chose Computer Science or I.T. instead of Business Administration (I realize that we’re talking about students taking an elective here, but I’ve heard that for some schools, this is the only elective available). So we would be doing them a disservice if we forced them into something they didn’t sign up to when they chose the program.

Keeping these two realizations in mind what then should be the course’s objectives?

Produce entrepreneurial experts? No.

Produce business planning experts? No.

Produce businessmen and women? No.

The course’s objective should be simply to produce students who know their place in a business. The course only needs to teach the student the significance of each “pillar” (i.e. Finance, Marketing, Operations, HR) of the organization, but not the intricacies of each. That is, he/she should understand by the end of the course the purpose of Finance, Marketing, Operations, and HR, but not necessarily how they go about fulfilling that purpose.

At the end of the elective, if the student becomes interested in acquiring more knowledge on entrepreneurship, then very good! He/she can learn more by enrolling in management programs or joining business planning competitions (provided they team up with business-minded individuals) on their own free will. If, however, at the end of the elective the student still is not interested in entrepreneurship, then so be it. Like I said, It’s not, after all, what he/she signed up for when he chose C.S. or I.T. for his program.

What should be required of the students to pass the course?

As I’ve hinted above, requiring the students to produce business plans by the end of the course is unrealistic. We can’t expect them to effectively undertake market research, market segmentation, discounted cash flow analysis, organizational planning, etc. after taking just one elective. The only requirement that I see fit for this kind of course and for the kind of students it intends to teach is a final written exam testing them on their understanding of a business and its pillars.

Who should design and manage the course?

With all due respect to the C.S. and I.T. faculty of the universities here in Davao (I know you are all knowledgeable in the fields that you are in), I believe that the course would be better designed by the faculty of management. Just as a software programming course is better designed and implemented by someone who knows programming, so must an elective on entrepreneurship be designed by someone who knows business management.These are just some of my initial thoughts on the course’s design. My hope is that it somehow starts a discussion among the relevant individuals in the Davao academe. Any comments and suggestions are more than welcome. You may use the comment box below for now.

Over the past few months I have learned and collected a list of principles that make technopreneurship unique from entrepreneurship. Here is that list:

1. Nothing to see here.

I have learned that there are no special principles that make technopreneurship unique from entrepreneurship: Both regard innovation critical in remaining competitive in the marketplace, both regard management important to staying in control, and both view profitability as an important constraint that must always be satisfied lest the firm fall into oblivion.

The parameters of both technopreneurship and entrepreneurship are the same and the way I see it is that the term “technopreneurship” is redundant if not misleading (some people tend to only see the “technology” part and forget about the “entrepreneurship” part when the word technopreneurship is used). If a community wants to step up its technopreneurial know-how, what it needs to do first and foremost is learn and master the principles of entrepreneurship.

Recommended Reads:

• Innovation and Entrepreneurship by Peter F. Drucker
• The Essential Drucker (A compilation of Drucker’s work. Includes chapters from Innovation and Entrepreneurship)

A dissatisfied customer who doesn’t complain won’t be a customer for long.

Think about it. What is the underlying reason behind customer complaints? Is it because the customer just wants to lash at you one last time before she goes to the competition? I doubt if that’s even true 1/3 of the time. If the customer can go straight to your competitor, what does she care about you? She’s not being paid to help you improve your product!

Remember, she’s the one paying you with the expectation that you’ll deliver as promised. When your customer complains, whether politely or with a vengeance, it’s usually because, at the back of her head, she expects to come back at least one more time in the future to purchase your product. Treat her with respect and, if possible, engage in a healthy communication process with her to learn about how you can improve your product offering. It’s the least you can do.

This is part 3 of my first look in technology roadmapping. Part 1 and 2 are here and here respectively.

As mentioned earlier, technology roadmapping is not limited to a single product. Phaal et al. (2004) identified eight different types of roadmaps which may be used for different purposes. These eight types will not be discussed here and only a subset will be briefly described. One type is a product planning roadmap used for a single product. For instance, a product planning roadmap would be used in conjunction with the technology roadmap (shown here) to show, in more detail, the roadmap of the product. Another roadmap that Phaal et al. have identified is labelled as “service/ capability planning” which is designed for businesses in the services markets. It is worth noting that this type of roadmap bears a number of similarities with the balanced scorecard, except that it incorporates the time dimension. Another type of roadmap is referred to as the strategic planning roadmap which is the one depicted in Figure 1. Lastly, Phaal et al. identified a roadmap type which they labelled as “Long-range planning.” This type of roadmap is normally used at the sector or national level and is developed to serve as a guide for participating organisations in developing their own individual roadmaps. Regardless of their differences, a common theme among these roadmaps is the integration of market requirements with technological capabilities to achieve the goals of the business or an industry.

The use of technology roadmapping clearly provides advantages to a firm in that it allows it to link the needs of its customers with the technologies and capabilities that it needs to produce or acquire. Some scholars warn, however, that while technology roadmapping sounds straightforward enough in writing, putting it into practice requires considerable resources and commitment. Groenveld in 1997 stated that “the process of building a roadmap…is less simple. Differences in background, thinking and ways of working among different departments (marketing, development, manufacturing, etc.) need to be reconciled.” Thus, it needs to be stressed that while technology roadmapping provides management with a better means to strategically manage the technologies available to the company, it is not a silver bullet. Complementing it with excellent leadership and project management skills is critical and remains indispensable in today’s business environment.

This concludes my first look at technology roadmapping. For a list of references, please see the first post of this series.

Further Reading

• Peter’s Technology Roadmapping Update website.
• Technology Roadmapping in Wikipedia (courtesy of Peter)

For a brief introduction on technology roadmapping, see my earlier post.

While understanding the basic parts of a roadmap is important, it is just as critical to understand the process that produces such a roadmap. To elaborate on the technology roadmapping process, we refer to Bray and Garcia (1997) who depict the activity as being comprised of three phases: Preliminary Activity, Development of the Technology Roadmap, and Follow-up Activity. The purpose of the first phase is to ‘set up the stage’ for the actual technology roadmapping activity that will happen on the next phase. In this phase, the authors stress the importance of satisfying critical conditions by ensuring that there is “a perceived need for a technology roadmap and collaborative development,” that relevant participants from different functional lines are involved, and that it is clear to everyone that the purpose of the roadmapping activity is to find solutions for a given set of needs and not the other way around. Still in the first phase, another condition that must be met is that there must be a clear provision of leadership and sponsorship since the planning activity will require a considerable amount of resources before the final output starts becoming useful to the concerned parties. Finally, in this first phase, the authors urge to define the context of the roadmap by delineating its scope and boundaries. In some cases, this means conducting the activity as a part of the strategic planning process. These—the authors state—are the necessary preliminary activities that need to be conducted to facilitate the success of technology roadmapping. However, Walsh (2004) states that, when developing a roadmap for disruptive technologies, the roadmapping team needs to first understand the nature of these disruptive technologies before proceeding to the second phase.

Once the preliminary activities have been completed, the roadmapping team may now proceed to the second phase which is concerned with the actual development of the technology roadmap. In this phase, the first activity is involved with identifying the product for which the roadmap is to be developed. It is important to note, however, that the term ‘product’ is being defined loosely here to mean physical goods, a service, or even a set of goods and services provided by an entire industrial sector (a discussion of the use of roadmaps in these other scenarios will be done in a later section). Thus, in this activity, the team begins by linking a product and its versions across time that will cater to evolving market requirements. The next activity then involves identifying the critical system requirements in order for the product to meet market needs. The information gathered in this activity would then form the product’s ‘performance envelope’ as depicted in Figure 2. Based on this, the team then proceeds to delineate the major technology areas that will contribute to the achievement of the desired performance envelope. For example, if one requirement in a new mobile phone’s performance envelope is a size no thicker than 5mm and with a battery life of 200 hours, then the technology areas to consider would be microchip design and manufacture, display technologies, and battery design among others. Once these technology areas have been identified, the next step is to specify the drivers and targets for these technology areas. For example, in the case of the 5mm mobile phone, technology drivers might include microchip power consumption and minimum display lumens. At this point, the team should have enough information to list the technologies that are available or can be made available within the specified timeline. For example, in the case of display technology, the team might identify LCDs and LEDs as two of the possible alternatives. After investigating the potential of these alternatives, the team shall then identify which technology to pursue. Groenveld (1997) suggests to use the Innovation Matrix, as a tool to decide which technology to choose. The final step in this second phase is to produce the technology roadmap report which, according to Bray and Garcia (1997), should include critical success factors or “[those factors] which, if not met, will cause the roadmap to fail.”
It is important to note, however, that in technology roadmapping, product performance does not only depend on the needs of the market, but on the technologies as well. Phaal et al. in 2001 stated that “The ‘performance envelope’ is dictated by a trade-off between market pull (requirements) and technology push (capabilities).” The following is taken from their presentation.

From this diagram we find that while product performance helps us identify the technologies necessary to achieve the target levels, the identification of technologies themselves also serve to refine the target performance levels and thus the possible market requirements that the product can address. For example, the market may require a portable computer that can be folded like paper, but if present capabilities indicate that this is not feasible within the next 30 years, such a level of performance needs to be adjusted accordingly. It’s interesting to note that this type of spiral relationship is similar to the whole strategic planning process where, for instance, identification of the gaps may also serve to refine the targets set by the firm in the second step (i.e. where do we want to go?).

After the technology roadmap report has been produced, the third phase now focuses on ensuring that the plan is successfully implemented and updated as needed. In this phase, the first activity involves submitting the plan to a larger group for validation as well as to create buy-in. This step is critical since the plan will be of no use if the larger group responsible for implementing it do not believe in its potential. Once buy-in from the relevant groups and/or individuals has been achieved, the next step is to develop an implementation plan that clearly articulates the operational activities needed to achieve the targets specified in the roadmap. Finally, to ensure that the roadmap remains relevant, the firm must ensure that it is continually reviewed and updated as new events occur. A key thing to keep in mind here is that it is the quality of the planning activity that determines success and that the actual document specifying the plan is only a by-product. That is, the technology roadmap should be a living document that regularly updates itself as new, and perhaps unexpected, developments occur in the environment.

In the next post of technology roadmapping, we will take a brief look at how the tool can be used for other purposes. For a list of references, please see the bottom part of my earlier post.

Technology roadmapping is an organisational process designed to align business objectives with available or yet-to-be available technologies. Bray and Garcia (1997) describe it as “a way to identify, evaluate and select technology alternatives that can be used to satisfy the need [of the market].” It is also a tool that should be used in the context of an organisation’s strategic planning process. Strategic planning involves asking (and answering) the following four questions: “where are we now?”, “where do we want to go?”, “how do we get there?” and “how do we know we are getting?”. Technology roadmapping is used in conjunction with other tools to help answer the question of how the firm will get to where it wants to go. Groenveld (1997) and Phaal et al. (2004) provide schematic diagrams of a technology roadmap which have been adapted and depicted below.

In the above diagram, the firm is represented by the solid box with the leftmost end representing the firm’s current state as determined in the first phase of strategic planning (where are we now?). The rightmost end of solid box represents the corporate objectives of the firm (where do we want to go?). Going from left to right in this diagram would be going forward in time. The actual technology roadmap then is represented by the dotted box where the top layer represents the market requirements partially determined during the first phase of the strategic planning process and perhaps further elaborated on during the rodmapping activity itself. Right below is the product layer which specifies which products will cater to the market requirements. From the example diagram we can see that this firm will develop a second, interim product that will then be discontinued once the third product is released to market. The third layer in the roadmap is the technology layer which specifies the technologies that will support the planned product roll-out. These technologies may be those that are incorporated into the product itself or they may also be technologies that are used in the process of manufacturing each product. Finally, there are the R&D projects that will be the source of supporting knowledge for the attainment of the critical technologies. R&D projects have been depicted outside of the solid box since—depending on the capacity of the firm—R&D may fall under the responsibility of external research organisations with whom the firm merely forms linkages throughout the development process.

For those who have used Gantt charts and the Balanced Scorecard, technology roadmaps will appear familiar. Indeed, some scholars admit that the technology roadmap, or at least, some of its flavors (there are at least 8), is actually derived from the two. In the next part, we will take a brief look at the process of developing a technology roadmap.

References

Bray, O. H. and M. L. Garcia 1997. Technology Roadmapping: the Integration of Strategic and Technology Planning for Competitiveness. Innovation in Technology Management-The Key to Global Leadership. PICMET’97: Portland International Conference on Management and Technology:25-28.

Groenveld, P. 1997. Roadmapping Integrates Business and Technology. Research Technology Management. 40(5):48–55.Hill, T. 1994. Manufacturing Strategy: Text and Cases (Second Edition). Illinois: Richard D. Irwin Inc.

Phaal, R., C. J. P. Farrukh, and D.R. Probert 2001. Fast-start Technology Roadmapping. In T. M. Khalil, L.A. Lefebvre, R. M. Mason (Eds.), Management of Technology: the Key to Prosperity in the Third Millennium: Proceedings of the 9th International Conference on Management of Technology (IAMOT). Miami FL, 21-25th February, Pergamon, Amsterdam.

Phaal, R., C. J. P. Farrukh, and D. R. Probert 2004. Technology Roadmapping – A Planning Framework for Evolution and Revolution. Technological Forecasting and Social Change. 71:5–26.

Tidd, J., J. Bessant, and K. Pavitt 2006. Managing Innovation: Integrating Technological, Market and Organizational Change. West Sussex:Wiley.

Walsh, S. T. 2004. Roadmapping a Disruptive Technology: A Case Study on the Emerging Microsystems and Top-down Nanosystems Industry. Technological Forecasting and Social Change. 71:161–185.

Key Points

• An incubatee must balance short and long term responses to new technical and market opportunities;
• Incubatees must be encouraged to use control systems within their operations at the early stages; and
• Interaction among incubatees is vital.

Balancing Short and Long-Term Response
The forces that push a business to concentrate and maximise profits from an existing product line are regularly in conflict with the forces that push that same business to explore new and potentially profitable areas. Scherer and McDonald state that a common failure among small businesses is “the underestimation of the time and resources required to successfully commercialize the first product before moving on to the development of second-generation products” (1988). A well-managed incubator should be able to provide assistance in balancing these two forces in a manner that does not strain the incubatee’s resources while regularly upgrading the same incubatee’s competitiveness.

Control Systems
Management control systems are important because they are one of the tools that managers use in implementing desired strategies (Anthony, 2000). They play a significant role in translating a company’s chosen strategy into performance results. Management control systems make use of explicit corporate objectives to gauge and consequently correct discrepancies in the firm’s trajectory and progress and thus optimise its performance. Without it, a firm will be aimless despite the quality of its plans. Thus it is important for an incubator to assist the incubatee in building strong internal control systems if it is to succeed and remain sustainable after it graduates from the incubation process.

Incubatee Interaction
While an external network is crucial in the success of the incubatees, an internal network, that is a network among incubatees, is also just as important. Bollingtoft and Ulhoi (2005) state that while weak ties have often been associated with idea generation, strong ties tend to be related to problem solving. Within an incubator, the relationships formed between incubatees have the larger potential to develop into strong ties that can significantly improve their problem-solving skills. Informal interaction of individuals across the tenants contributes to formal cooperation between tenants. Likewise, formal cooperation between tenants contributes to informal interactions among individuals (Bollingtoft and Ulhoi 2005). This cycle is important for building trust among tenants and consequently reducing transaction costs and paving the way for increased absorptive capacity. Bollingtoft and Ulhoi (2005) however, point out that the cycle depends on the potential for synergy among tenants which is often manifested by complementary skills and competencies that can be advantageous to the concerned tenants. It should be able to produce something concrete such as providing additional technical skills or winning larger contracts via joint alliances. Thus, the suggestion of Hansen et al. (2000) to adopt a portfolio strategy in selecting among potential firms for incubation may be sound advice.

This wraps up my initial research on business incubators. For a backgrounder on the incubator-incubation concept and for a complete set of references, see my earlier post.

This is part 2 of a four-part series on strategic planning. Part 1 is here.

For this part, we will concern ourselves with the second question: where do we want to go? It is in this part where the firm formulates (if it hasn’t done so previously) or re-formulates (as needed) its hierarchy of objectives. This hierarchy of objectives is composed of the following in decreasing scope and time span:

The double-headed arrows between the vision, mission, and goals represent a two-way relationship. From top to bottom, the vision serves as a guide for the mission and, in turn, the mission serves as a guide for the goals. That is, there needs to be alignment in the three. From the bottom up, achievement of each goal contributes to the achievement of the mission. Likewise, the achievement of each area of the mission contributes to the achievement of the corporate vision.

In case you are wondering, the purpose of this activity is so that we will be able to identify the ‘gaps’ of the firm by comparing the corporate objectives with the firm’s present situation. Recall that the firm’s present situation was identified when we answered question #1. Note, however, that dealing with the gaps themselves will not happen until the third part of the strategic planning process. In this second part, we will only concern ourselves with identifying where the firm wants to be in 10 or 20 years.

Corporate Values
In the above diagram, we did not include the corporate values as part of the hierarchy. Some firms might choose to leave these values out while others would consider the identification of values very important. At any rate, corporate values are defined as the guiding principles that an organization lives by. These are things that are so important for the whole company such that they cannot be compromised. A few examples of corporate values:

• Workmanship quality;
• Customer service;
• Concern for employees;
• Excellent supplier, creditor, and investor relations;
• Concern for the environment and the Philippines.

Corporate Vision
The vision statement answers the question “if the organization can be whatever I want it to be, what do I want it to be?” A vision statement is sometimes time-encompassing (although sometimes it can just be one that takes a while to accomplish) and is best when it subsumes the corporate values. Some examples of a corporate vision:

• To be recognized worldwide as a premier provider of quality generators;
• A computer on every desk and in every home (Microsoft)
• To become the most successful and respected lift truck company in the U.S. (Toyota Industrial Equipment)

Mission Statement
A mission statement answers the question “what must the organization be, and do, for whom, in order for it to be what it wants to be?” To aid in the development of the company’s mission statement a strategist may employ tools such as Stakeholder Analysis. The use of this tool simply involves identifying the stakeholders of the firm (customers, employees, suppliers, investors, etc.), their expectations of the firm, and what the organisation can do for them. The following example is the mission statement of Deco Machine Shop, Inc. of Davao City, Philippines:

We exist to enhance the success of our customers.

We strive to be recognized worldwide as a premier provider of high-quality machine parts and services. In the process:

• Customers will choose us first because we deliver exactly what they need when they need it;
• People will be proud and eager to work here;
• Suppliers and creditors will be more than willing to assist us with our requirements;
• Investors will view us as an excellent long-term investment choice; and
• The community will see us as a model corporate citizen contributing positively to the nation’s economy, the preservation of the environment, and the overall well-being of the Philippines.

Goals
Goals represent the results expected from pursuing certain strategies (David 199 and must be specific, measurable, attainable, realistic, and time-bound (S.M.A.R.T.). They will become the basis for the annual objectives to be set for each functional area (accounting, marketing, operations, and HR). The time-frame for both corporate-level goals and strategies are normally identical spanning three to five years. The following are sample goals:

• Achieve 80% plant utilisation by 20XX
• Relative to 20XX, Return on Equity (ROE) should be 4 times as much by 20XX
• Relative to 20XX, annual revenues shall be thrice as much by 20XX

Wrap Up
As we have seen, answering question #2 involves identifying the firm’s hierarchy of objectives in the form of its vision, mission, and goals. The importance of this activity cannot be stressed enough since these objectives will be used together with the findings of the internal and external assessment to close the firms ‘gaps’ in the third phase of the strategic planning process.

In part 3, we will tackle the third question: “how do we get there?”

References

David, F. R. 1998. Strategic Management (International Edition). Singapore: Prentice Hall

“…being an entrepreneur is not a personality characteristic, it is a learned skill…An entrepreneur doesn’t seek risk; he or she tries to minimize risk…it’s actually about managing uncertainty. What is teachable is how, given your character, you can live in an entrepreneurial way–as opposed to changing your character.”

–Prof. P. W. Marshall. Entrepreneurship: It Can Be Taught.
Harvard Business School New Business. Winter 2002.

“We don’t urge our students to ‘just do it.’ We spend a lot of time telling them to get to know an industry, get to be known in an industry, develop your skills, develop your contact base.”

–Prof. H. Stevenson. Entrepreneurship: It Can Be Taught.
Harvard Business School New Business. Winter 2002.